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Why so many Olympic hopefuls are running in all-black,…

29 June 2024
by admin

Christopher Royster, left, and JT Smith, athletes who participate in Bandit Running’s Unsponsored Project, at the 2024 Olympic trials in Eugene, Oregon.

Courtesy: Bandit Running

There’s an army of unsponsored athletes commanding attention at the U.S. Track & Field Olympic Trials this year, decked out in all-black, logo-less gear.

The 35 athletes are supported by apparel company Bandit Running’s Unsponsored Project, an effort to challenge the standard sponsorship model for professional athletes and boost up-and-coming competitors.

Unsponsored athletes in track and field would typically purchase their own apparel bearing the emblems of major brands, effectively providing free advertising for the companies. Instead, Bandit Running offers Olympic hopefuls the all-black kits and warmups — along with short-term endorsement deals.

Bandit co-founder Tim West said the company is giving out at least 35 two-week deals for unsponsored runners at the trials, a U.S. Olympian’s gateway into the four-year games. The deals consist of unbranded apparel, a platform and cash to cover expenses. Last year, Bandit partnered with nine athletes.

“We’re really hoping for a new sponsorship model where brands take a healthy piece of their budget and apply it to the kind of amateur, sub-elite athlete to help grow the sport. I think when you lift up, sort of the bottom, everything pushes up,” West told CNBC.

Bandit’s deals have a built-in release clause, West said, allowing an easy out for athletes who get a traditional sponsorship offer during the trials.

Given the high prices associated with competing, West said unsponsored athletes are “investing in themselves,” posing an opportunity for brands to step in and help out.

And, the all-black, logo-free kits help call attention to which athletes may be available to strike a longer-term deal.

Among them is Courtney Okolo, a 400-meter runner.

After winning a gold medal in the 2016 Rio Olympics and being sponsored by Nike for four years, Okolo, 30, is embracing the Unsponsored Project. She said getting support while competing without a sponsorship is difficult, but Bandit’s initiative makes it feel like she isn’t doing it all on her own.

Courtney Okolo, an athlete participating in Bandit Running’s Unsponsored Project, at the 2024 Olympic trials in Eugene, Oregon.

Courtesy: Bandit Running

Considering the costs of training, flying to Eugene, Oregon, for the trials, booking a hotel and buying apparel to compete in, Okolo said, even just showing up to compete is expensive. Though she added that she’s been able to pace herself with money acquired over four years via her previous sponsorship, only a few athletes within the sport have such partnerships.

“I know for a lot of athletes, it’s super hard,” Okolo said. “They could still be running well, but financially, they can’t do it because training and all that takes so much of your time. It’s hard to have another full-time career to support yourself financially and train and be the best athlete. So, sometimes you have to just pick one or the other, and that can be really tough.”

Since graduating college, Brandee Johnson, 26, has been working two jobs and a side gig while training for hours a day to make her Olympic dreams happen. Johnson is an unsponsored track athlete who qualified for the Olympic trials this year.

Johnson said she joined the Unsponsored Project as an alternative avenue to achieving her goal, while attaching her name to something that is making a positive impact in peoples’ lives.

“It helps me be more comfortable and take a deep breath and be like, ‘Okay, I can do this, and I have everything that I need in order to be successful,'” Johnson said.

Science & Environment

Tesla loses its EV quality edge as repair problems…

28 June 2024
by admin

A dog looks out the window from a Tesla electric vehicle charging at a Tesla Supercharger location in Santa Monica, California on May 15, 2024.

Patrick T. Fallon | AFP | Getty Images

Tesla is losing its lead over legacy automakers in the quality of its new all-electric vehicles, according to an annual influential study conducted by J.D. Power.

The 2024 U.S. Initial Quality Study found the quality of Tesla’s battery-electric vehicles, or BEVs, and those of traditional carmakers were the same, at 266 problems reported per 100 newly sold or leased vehicles.

Previously, Tesla models had outperformed the electric vehicles of legacy automakers in the annual survey. Last year, the Tesla received a rank of 257 problems per 100 vehicles, compared with 265 problems per 100 vehicles on average for EVs from traditional automakers.

The study attributes Tesla’s growing problems to a negative response from customers after the company removed traditional feature controls, such as turn signals and wiper stalks.

Across the broader industry, not just BEVs, Tesla has consistently ranked toward the bottom in initial quality since J.D. Power began including Tesla in the study in 2022.

Overall, the study, which included repair visits data of franchised dealers for the first time, found electric vehicles such as BEVs and plug-in hybrid electric vehicles (PHEVs), are plagued with more problems than traditional gas- and diesel-powered vehicles with internal combustion engines.

“Owners of cutting edge, tech-filled BEVs and PHEVs are experiencing problems that are of a severity level high enough for them to take their new vehicle into the dealership at a rate three times higher than that of gas-powered vehicle owners,” J.D. Power’s senior director of auto benchmarking, Frank Hanley, said in a news release.

The study found that plug-in vehicles require more repairs than gas-powered vehicles across all repair categories.

BEVs averaged 266 problems per 100 vehicles, 86 points higher than gas- and diesel-powered vehicles, which averaged 180 problems per 100 vehicles, according to the study. A lower score indicates higher vehicle quality.

Top concerns included features, controls and displays as well as wireless smartphone integration, as customers reported frequent difficulties with Apple CarPlay and Android Auto.

The study also reported frustration over false warnings, unnecessary traffic alerts and automatic braking features. Specifically, rear seat reminders contribute 1.7 problems per 100 vehicles across the industry, as owners report receiving signals even when no one is in the rear seat.

“It is not surprising that the introduction of new technology has challenged manufacturers to maintain vehicle quality,” Hanley said.

— CNBC’s Michael Wayland contributed to this report.

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Science & Environment

Darden beats on earnings, even as Olive Garden, fine-dining…

20 June 2024
by admin

Olive Garden Italian restaurant sign showing company logo, Spokane Valley, Washington, owned by Darden Restaurants Incorporated headquartered in Florida.

Universal Images Group | Getty Images

Darden Restaurants on Thursday reported mixed quarterly results as Olive Garden’s same-store sales fell for the second consecutive quarter.

For fiscal 2025, Darden is forecasting that its same-store sales will grow just 1% to 2%.

Shares of the company rose more than 2% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting for the quarter ended May 26, based on a survey of analysts by LSEG:

Earnings per share: $2.65 adjusted vs. $2.61 expected
Revenue: $2.96 billion vs. $2.97 billion expected

Darden reported fiscal fourth-quarter net income of $308.1 million, or $2.57 per share, down from $315.1 million, or $2.58 per share, a year earlier.

Excluding costs related to the Ruth’s Chris acquisition and other items, the company earned $2.65 per share.

Net sales rose 6.8% to $2.96 billion, fueled by its acquisition of Ruth’s Chris Steak House and 37 other net new locations.

Darden’s overall same-store sales were flat for the quarter, dragged down by weaker-than-expected sales at Olive Garden and its fine-dining restaurants.

Olive Garden’s same-store sales fell 1.5%. Analysts were expecting the Italian-inspired chain to report flat same-store sales growth, according to StreetAccount estimates. Last quarter, Olive Garden’s same-store sales fell 1.8%, driven by a pullback from low-income consumers.

Darden’s fine-dining restaurants, which include The Capital Grille and Eddie V’s, saw their same-store sales shrink 2.6% in the quarter. That division now includes Ruth’s Chris, but those same-store results won’t be included in the category total for several more quarters.

LongHorn Steakhouse, which is overtaking Olive Garden as the gem of Darden’s portfolio, was the only segment to report same-store sales growth. The chain’s same-store sales rose 4% in the quarter.

Looking to fiscal 2025, Darden is forecasting earnings per share from continuing operations of $9.40 to $9.60, in line with Wall Street’s expectations of $9.55 per share. The company is also anticipating net sales of $11.8 billion to $11.9 billion, on the low end of analysts’ expectations of $11.94 billion.

Darden is projecting total inflation of 3% and same-store sales growth of 1% to 2% in fiscal 2025. Ruth’s Chris won’t be included in Darden’s same-store sales until the second quarter of fiscal 2025. The company plans to spend $550 million to $600 million on capital expenditures.

Science & Environment

Boeing CEO blasted by Senate panel: ‘It’s a travesty…

18 June 2024
by admin

Boeing’s CEO Dave Calhoun and chief engineer Howard McKenzie turn to face those who lost loved ones in fatal crashes as they testify before a Senate Homeland Security and Governmental Affairs Committee Investigations Subcommittee hearing on the safety culture at Boeing, on Capitol Hill in Washington, U.S., June 18, 2024.

Kevin Lamarque | Reuters

WASHINGTON — Boeing CEO Dave Calhoun was hammered by a Senate panel on Tuesday over the company’s safety and quality lapses, a host of whistleblower allegations about company corner-cutting and retaliation, and his own pay package.

Calhoun, who said in March that he will step down by year’s end, defended the plane-maker’s actions to try to improve manufacturing quality and to fix its tarnished safety reputation in the wake of a midair door-panel blowout on an Alaska Airlines flight in January.

The company has still not named a replacement for Calhoun, who took over after its previous leader was ousted for the handling of two fatal Boeing crashes.

“Much has been said about Boeing’s culture. We’ve heard those concerns loud and clear. Our culture is far from perfect, but we are taking action and making progress,” Calhoun told the subcommittee.

Hours before the hearing the Senate subcommittee released whistleblower claims on Tuesday from Sam Mohawk, a quality-assurance investigator at Boeing, alleging the company lost track of parts that were damaged or not up to specification and that “those parts are likely being installed on airplanes.” The parts Mohawk flagged were in Boeing’s Renton, Washington, plant, where the company makes its best-selling 737 Max.

Mohawk said he was retaliated against and that he was told by supervisors to hide evidence from the Federal Aviation Administration, according to a memo shared by the committee on Tuesday. Dozens of important parts were stored outside during an FAA inspection, including 42 rudders as well as winglets and stabilizers, Mohawk alleged in claims with the Occupational Safety and Health Administration, the memo said.

Boeing issued a written warning against Mohawk, saying he engaged in “unacceptable/disruptive behavior or communication,” according to Mohawk’s complaint, which the subcommittee also made public. It said he could be “discharged” if the behavior continued. Mohawk’s also alleged the company reduced staffing during his shift making it difficult to complete tasks.

A Boeing spokeswoman said the company received the claims Monday night and that staff are reviewing them.

“We continuously encourage employees to report all concerns as our priority is to ensure the safety of our airplanes and the flying public,” she said.

An attendee at a Senate hearing with Boeing’s CEO Dave Calhoun over the company’s safety record on June 18, 2024.

Leslie Josephs | CNBC

The FAA said it has seen an increase in the number of reports from Boeing staff since the door-plug blowout in January.

“We thoroughly investigate every report, including allegations uncovered in the Senate’s work,” the agency said Tuesday. The FAA declined to comment on the specifics of the latest allegations.

Mohawk is not testifying before the Senate subcommittee’s hearing.

Potential prosecution

The hearing and new whistleblower claims are further complicating matters for Boeing. The company already faces potential U.S. prosecution after the Justice Department said last month that the plane-maker violated a 2021 settlement tied to 737 Max crashes in 2018 and 2019 that claimed 346 lives. A flight-control system Boeing included on the Max, the latest generation of a jet that has flown since the late 1960s, was implicated in the crashes.

That agreement, which protected the company and its executives from facing criminal charges tied to the crashes, would have expired just days after the Alaska Airlines incident in January. The Department of Justice has until July 7 to decide whether to prosecute.

Several victims’ family members attended Tuesday’s hearing. Relatives of Max crash victims met with DOJ officials late last month to urge the U.S. to prosecute.

At the start of the hearing, Calhoun stood and apologized to the victims’ families, many of whom held photos of their lost loved ones.

“We’re here because we want Boeing to succeed,” Sen. Richard Blumenthal, D-Conn., the subcommittee’s chair, said at the start of the hearing on Tuesday, pointing to the jobs Boeing provides and the products it supplies to the U.S. military. “It’s not enough for Boeing to shrug its shoulders and say, ‘Mistakes happen.'”

Blumenthal railed against Boeing’s responses to the subcommittee’s request for more information, holding up a document and calling it “complete gobbledygook.”

“I would describe it precisely as you did,” Calhoun replied.

Why the Boeing 737 Max has been such a mess

The company is trying to stamp out quality flaws on jets and reduce so-called traveled work in which production steps are completed out of order, something it has done to address defects. Last month, Boeing pointed to a host of other changes to encourage workers to speak up about problems in its factories after several whistleblowers raised concerns about quality issues and retaliation.

Calhoun defended the company’s handling of whistleblowers and said that some employees have been fired for retaliation, though he declined to provide names, citing the individuals’ privacy.

Sen. Josh Hawley, R-Mo., accused Calhoun and Boeing of “strip mining” the company by cutting corners and criticized his compensation package of nearly $33 million, up 45% last year from 2022.

“And frankly, sir, I think it’s a travesty that you are still in your job,” Hawley said.

Production slowdown

The FAA has taken a hard line against Boeing, with Administrator Mike Whitaker saying the regulator will keep inspectors on the ground at the company’s facilities until the agency is satisfied with safety improvements.

The FAA had already halted Boeing’s ability to increase production of the Max, its bestselling plane. Whitaker last month said it would likely be several months before lifting that restriction.

Boeing’s aircraft output has suffered from the resulting crisis, forcing big customers such as Southwest Airlines and United Airlines to adjust their growth and hiring plans.

Boeing’s lower production and deliveries have hurt its cash flow, and it warned investors last month that it would burn, instead of generate, cash this year, using about $8 billion in the first half of the year.

The company’s shares are down nearly 33% this year through Tuesday’s close, compared with a roughly 15% gain in the S&P 500.

Separately, Boeing is facing supply chain issues. Spirit AeroSystems, a major supplier for both Boeing and Airbus, said last week that titanium entered the supply chain with falsified documents. The supplier said that despite the falsified documentation, more than 1,000 tests confirmed that the material is “airplane-grade titanium.”

Boeing has been trying to purchase fuselage supplier Spirit, a deal Calhoun said is “more than likely” to be finalized in the first half of the year. With less than two weeks to go in that period, Calhoun declined to comment on Tuesday whether he still expects a deal in that time frame.

— CNBC’s Ece Yildirim contributed to this report.

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Why Boeing wants to buy back Spirit AeroSystems

Science & Environment

Boeing expects a 2024 cash burn, slow recovery of…

23 May 2024
by admin

An American Airlines Boeing 737 MAX 8 flight from Los Angeles approaches for landing at Reagan National Airport shortly after an announcement was made by the FAA that the planes were being grounded by the United States in Washington, U.S. March 13, 2019.

Joshua Roberts | Reuters

Boeing will burn through cash this year and deliveries of new planes won’t improve in the second quarter from the first, as the manufacturer deals with a host of production challenges tied to its bestselling planes, the company’s CFO, Brian West, said Thursday.

A month ago, West forecast Boeing would generate free cash flow “in the low single-digit billions.” The new forecast shows the mounting costs of the plane maker’s latest crises.

Boeing burned through nearly $4 billion in cash in the first quarter and West said that figure could be similar or “possibly a little worse” in the second quarter, but that the company would likely return to generating cash in the second half of 2024.

The company’s aircraft deliveries in the first quarter fell to the lowest level since the pandemic. The bulk of a plane’s price is paid when it’s handed over to a customer.

Boeing’s shares lost more than 7% on Thursday after West’s comments at a Wolfe Research industry conference, a slide that weighed down the Dow Jones Industrial Average.

“We have frustrated and disappointed our customers because of some of the production supply chain issues that we’re up against,” West said at the conference. “And while I understand that frustration, the most important thing we can do for our customers and the supply chain in the industry is to focus on the actions that are underway as we speak so that we could stabilize this production system, improve quality, and get more predictable.”

Boeing CEO Dave Calhoun in March said he would step down by the end of the year, and the company replaced the chairman and chief executive of its commercial airplane unit. Leading up to the shake-up, CEOs of major airline customers complained about delivery delays and difficulty planning flights because of surprise disruptions.

Boeing’s latest production issues surfaced after a door plug blew out midair from a nearly new 737 Max 9 at the start of the year, just as the company was trying to repair years of reputational damage from two fatal Max crashes in 2018 and 2019.

The accident increased federal scrutiny of the company, whose executives have vowed to stamp out production flaws and regain the trust of regulators, airline customers and the public.

Next Thursday, Boeing leaders are set to meet with the Federal Aviation Administration to present the company’s plan to improve its quality control, the FAA said. The agency gave Boeing 90 days to complete the plan starting in late February.

Other problems have also sprung up, including a pause on deliveries of 737 Max planes to China to review batteries for the cockpit voice recorder. Boeing said in a statement that it is working with “our Chinese customers on the timing of their deliveries as the Civil Aviation Administration of China completes its review of batteries contained within the 25-hour cockpit voice recorder assembly unit.”

Earlier this month, the FAA said it opened a new probe into the 787 Dreamliner inspections after the company disclosed “misconduct” by some employees. The agency said it was looking into whether employees falsified records.

Parts shortages have also slowed deliveries of Dreamliners, Boeing has said. American Airlines last month said it would cut some international flights because of delays of the wide-body jets. Other carriers, including United Airlines and Southwest Airlines, said they had to scale back growth and hiring plans because of delayed Boeing jets.

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Science & Environment

Starbucks shares sink 12% as coffee chain slashes 2024…

1 May 2024
by admin

A Starbucks coffee shop in Amsterdam.

Nicolas Economou | Nurphoto | Getty Images

Starbucks on Tuesday reported weaker-than-expected quarterly earnings and revenue, fueled by a surprise decline in same-store sales.

The coffee chain also slashed its forecast for its fiscal 2024 earnings and revenue, predicting that its cafes would keep underperforming for several quarters.

Shares of the company fell 12% in extended trading.

“In a highly challenged environment, this quarter’s results do not reflect the power of our brand, our capabilities or the opportunities ahead,” CEO Laxman Narasimhan said in a statement. “It did not meet our expectations, but we understand the specific challenges and opportunities immediately in front of us.”

The company’s same-store sales fell 4% as traffic to its cafes declined 6% in the quarter. Wall Street was anticipating same-store sales growth of 1%, according to StreetAccount estimates.

Across all regions, Starbucks reported shrinking same-store sales and falling traffic.

In the U.S., same-store sales decreased 3% as traffic sank 7%. This marks the second quarter that the company’s home market has struggled. Last quarter, executives blamed sluggish sales on boycotts targeting the company due to “misperceptions” of its stance on Israel.

Starbucks’ international segment reported same-store sales declines of 6% as both average ticket and transactions dropped. In China, Starbucks’ second-largest market, same-store sales plunged 11%, fueled by an 8% decline in average ticket.

“In this environment, many customers have been more exacting about where and how they choose to spend their money,” Narasimhan told analysts on the company’s conference call.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: 68 cents adjusted vs. 79 cents expected
Revenue: $8.56 billion vs. $9.13 billion expected

The coffee giant reported fiscal second-quarter net income attributable to the company of $772.4 million, or 68 cents per share, down from $908.3 million, or 79 cents per share, a year earlier.

Net sales dropped nearly 2% to $8.56 billion.

For fiscal 2024, Starbucks now expects revenue growth in the low single digits, down from its prior forecast of 7% to 10%. The company also revised its projections for global and U.S. same-store sales growth to a range of low single digits to flat from its previous forecast of 4% to 6%. Same-store sales in China are expected to decline by single digits, down from the prior outlook of a single-digit increase.

Starbucks now also expects earnings per share growth in a range of flat to low single digits. It previously forecast its earnings would climb 15% to 20% in fiscal 2024.

The company forecasts that sales will start improving in the fiscal fourth quarter.

Waning sales

Starbucks’ most dedicated customers have stayed loyal and been using discounts offered via the company’s mobile app, executives said. But coffee drinkers who visit only occasionally have been buying Starbucks’ macchiatos and cold brew less often, executives said; Narasimhan said those customers want more variety from their coffee.

Starbucks is planning to offer a version of its app that allows customers to order without being a loyalty member in order to attract these occasional customers to visit more frequently.

Narasimhan said Starbucks is also exploring how to meet overnight demand, from 5 p.m. to 5 a.m. The company conducted a pilot test, which Narasimhan said doubled business.

He also said the chain’s lavender drinks were one of its most successful launches.

“Building off that success, we are aggressively pursuing options to build a $2 billion business over the next five years,” he said.

McDonald’s, PepsiCo and other companies have said this quarter that low-income consumers have pulled back their spending and are looking for deals.

“While it was a difficult quarter, we learned from our own underperformance and sharpened our focus with a comprehensive roadmap of well thought out actions making the path forward clear,” CFO Rachel Ruggeri said in a statement.

Narasimhan also said that the company now expects supply-chain cost savings of $4 billion over the next four years, revising its prior forecast of $3 billion over three years.